Angola Hopes Key Reforms will Aid Efforts to Sell Oil Assets

In August, the government published an extensive list of assets that will be offered to investors via public offerings, stake sales, asset sales or tenders.

SEATTLE (Oil Monster): Angola is hoping sweeping economic reforms will smooth an ambitious plan to sell key state assets, including stakes in oil company Sonangol, a share of Puma Energy and more than 100 other enterprises.

Africa’s second biggest oil exporter is in a rush for cash as it struggles to cope with moribund crude prices, slumping output and years of mismanagement that left Sonangol bloated and inefficient.

In August, the government published an extensive list of assets that will be offered to investors via public offerings, stake sales, asset sales or tenders.

The swift timeline aims for an initial public offering of Sonangol in 2022, the sale of a 28% stake in Puma and its portion of oil venture China Sonangol in 2020 and the offloading of a share of Ivory Coast refinery SIR this year.

Central Bank governor Jose Massano told Reuters that there is “tremendous interest” in the asset sales, but also questions as the nation scrambles to shed an image of widespread corruption, state control and unfriendliness towards foreign capital.

“Most of the investors, they express concerns (over) the security of getting funds into Angola,” he said, adding there should not be any such problems.

“In the past, we have had that difficulty, but we have also introduced changes,” he said.

An anti-corruption drive has gathered steam since 2017, when Joao Lourenco ended ex-Angolan President Jose Eduardo dos Santos’ nearly 40-year grip on politics.

Lourenco dismissed the former leader’s daughter Isabel as Sonangol’s chair later the same year and the government has sought to crack down on the influence of the ex-first family and reform bloated state institutions.

The World Bank is advising on the asset-sale process to ensure it is transparent and open to a range of would-be investors.

 Courtesy: www.reuters.com